The suspects - 12 Pakistanis and two Indian nationals - were arrested less than two months before national elections in Spain, whose last vote in March 2004 was held in the wake of Europe's worst Islamic-linked terror attack.
There are fears that Islamic militants could try a similar plot to disrupt this year's vote, scheduled for March 9.
Interior Minister Alfredo Perez Rubalcaba gave no details on what sort of an attack was allegedly being plotted, but said authorities found four timers in some of the suspects' homes.
"When someone has timers at home you have no option but to think violent acts are being planned," he said, adding that more arrests were expected and the country was on high security alert.
Rubalcaba said the arrests - many of which were reportedly in Barcelona's Raval neighborhood - were prompted by information from several unspecified European intelligence agencies. Raval is home to one of Spain's largest concentrations of Pakistani immigrants.
Spain's leading El Pais newspaper noted that the discovery of the alleged plot coincided with a visit to Europe by Pakistani President Pervez Musharraf, who is scheduled to make stops in France, Britain and Switzerland in coming days. Officials in all three countries had been alerted.
However, the paper gave no indication of evidence that Musharraf was the target, and Rubalcaba made no mention of him in his news conference. Musharraf was not scheduled to visit Spain.
Civil Guard officers made the arrests as part of raids planned with the National Intelligence Center, the Spanish equivalent of the CIA, Rubalcaba said. Five homes were searched overnight, he said, and Spanish newspapers reported that a mosque and an unauthorized prayers center had also been targeted.
Prime Minister Jose Luis Rodriguez Zapatero confirmed the arrests and said investigations were continuing.
Europe's worst Islamic-linked terror attack took place in Spain on March 11, 2004, when bombs went off in railway carriages during the morning rush hour near Madrid's Atocha station. The attack killed 191 people and injured more than 1,800. Twenty-one people have been convicted of involvement in that attack.
The Madrid train attacks were claimed by Muslim militants who said they had acted on behalf of al Qaeda to avenge the presence of Spanish troops in Iraq, but Spain's courts found no evidence that al Qaeda ordered, knew about or financed the attacks.
Three days after the carnage, Spaniards ousted the conservative party of Jose Maria Aznar, a staunch Washington ally who had backed the U.S.-led war in Iraq. His successor, Zapatero, fulfilled an electoral pledge and brought the troops home shortly after taking power.
This year's vote is expected to be close, and observers have said an attack by Islamic militants or the Basque separatist group ETA could influence the results.
Since the Sept. 11, 2001, attacks in New York and Washington, Spanish police have arrested hundreds of Islamic terrorism suspects, many in connection with the Madrid attack.
In recent years police have also focused on cells suspected of recruiting mujahedeen fighters and suicide bombers, or of collecting money to finance al Qaeda-linked groups abroad.
Associated Press Writer Paul Haven contributed to this report.
By Harold Heckle